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tv   Worldwide Exchange  CNBC  January 9, 2014 4:00am-6:01am EST

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hello and welcome to "worldwide exchange." i'm ross westgate. the headlines today, highway to the danger zone. record low inflation in the eurozone putting increased pressure on the ecb to deliver more easing measures. what are the chances of mario draghi surprising us today? mark carney surprising the central bank. will they lower the unemployment threshold? china is leaving room for
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more pro growth policy. deflation over weak demand. and bah humbug. the uk retailers are disappointing sales sent morse onnis and tesco sales down to the bottom of the stoxx 600. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. hello. very warm welcome to today's edition of "worldwide exchange." plenty to get through. it's d-day for some of southeast asia's emerging markets as they size up the u.s. quantitative easing. we'll get the latest from singapore in around 15 minutes. we'll be speaking to the ceo of exxon about how shale is changing the world's biggest
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economy. after months in the shadows, edward snowden is expected to give testimony to the european parliament. that's around 40 minutes time. and the latest fomc minutes have provided some insight into the fed's strategy for tapering. we'll analyze all those details starting at 11:30 cet. if that's not enough, as the big freeze finally begins to thaw, we'll look at the economic impact. it's only starting to be realized what damage has been done by the polar voe text in america at 11:45 cet. if you have any thoughts, comments, questions, e-mails them to us, world would it@cnbc.com. that bit there. first, the u.s. federal reserve is going to proceed cautiously with its tapering of asset purchases. some members expressed concern the tightening may be interpreted as a signal the central bank would taper quicker
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than initially expected. most members suggested there's no set time scale for scaling back the program. the majority in the media expect to keep its main rate low. can mario draghi ignore the back drop of slowing inflation? our team is located outside the european headquarters in frankfurt and they join us now. annette and geoff are both with us. welcome to you both. clearly, we're not worried about deflationary threats. is that the message, geoff? >> well, i think it will be a reiteration of a line given back in an interview in december where for the time being, i think mr. draghi will, yes, reiterate that this isn't a major concern at this stage. we will keep an eye on it. and, of course, a reiteration of we have plenty of tools in the
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box still and we will do whatever it takes. >> yeah. he will most likely say that inflation expectations are firmly anchored. that's the term he always used. and, of course, we still need to wait because december inflation was expected to be -- to come in at a very low level. so the key issue now going forward will be how is inflation going to develop during the next couple of months. >> let's bring in tolsten pollet on that. tolsten is a key economic analyst. how much of an issue will this be? >> i think the issue of inflation or deflation is a key element in policy making these days. there are a lot of economists and policymakers that have become concerned about the risks of deflation. and, of course, there is a strong incentive now for central
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banks, in particular the european central bank to make use of this unfavorable outlook for pushing ahead with further easing policy. so i would imagine that this is an issue that will be addressed at this press conference. >> but will he do any more than verbally intervene, shall we say? is there any other plan that will be unveiled here? >> yeah, perhaps. i still think there's an easing bias in the ecb governing counsel. whether it will be -- the rate will be cut today or in february, i don't know. but further easing policies will be implemented. and this may include purchases of bonds or purchases of bank credit portfolios in order to provide further stimulus in the
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area. >> do you think they are going to wait until the constitutional court in germany is informing us about their opinion on the omt? >> with the, this is still an issue which hasn't been settled, you're absolutely right. but i would say in view of further deflation fears, i think the ecb clearly has the room for taking action. >> yeah, but probably at the same time they get a lot of discontent from politicians like mr. schroyer was saying yesterday. isn't that the case? >> you see, we live in the paper money world where you always have boom and busts. now the euro area is sill in a kind of bust episode.
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and when you look at farms and italy, the situation is not really a situation in which you could say the economy is really recovering. i would say problems are building up and problems can become very severe. and once the unemployment, for instance, unemployment rate keeps up, goes up further, i think there is the willingness among politicians in europe to save the euro project, there by allowing the european central bank to take further action of unconditional policy. >> by and large, the economies have been revising their growth expectations for the world as a whole and to some extent the eurozone. is there any reason, as far as your analysis is concerned, to be more pessimistic about the outlook? >> yeah. i think in the coming quarters, you will see more positive economic data in the euro area,
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but also in other major currency areas. the problem is, however, that this recovery is underpinned by extremely low interest rates. and the risk that further malinvestment is building up is clearly dishonorable, i would say. and we have seen it before. we have with monetary policies pursuing low interest rate policies, boom and bust cycle. now we are seeing a slight recovery, but at the risk there that sooner or later the recovery will end in another bust. >> thank you so much for coming down to us outside the ecb. and, ross, we'll send it back to you for the time being as we wait and watch the mr. draghi's next move on rate policy. >> yes. stay warm and dry, if you possibly can, as well. thank you both.
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plenty more from geoff and annette. meanwhile, are the days bank of england forward guidance numbers? mark carney is in focus ahead of its meeting today with many analyst he now tipping the bank of england to tweet the unemployment threshold. helia is outside the bank of england and joins us now. now, interesting, the fed last night from their minutes did discuss lowering their threshold. i wonder what's going on in the building behind you, helia. >> morning, ross. absolutely all about what happens in 2014 with forward guidan guidance. will it be tweaked? will it be somehow swept under the carpet and rates kept low despite meeting the threshold? remember when mark carney came into power, unemployment in the uk was 7.8%.
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and at that point, the bank of england behind me was talking about it coming down to 7% way at the end of 2016. of course, a lot has changed since them. now economists are predicting that, as you said, unemployment is currently at 7..6 of%, but expect it to drop rapidly. it will hit 7% by the middle of this year. what will the bank do? today they're going to have to start facing up to that. we have a recovering economy in the uk, unemployment falling. i asked the kwfr a couple of months ago would he tweak that threshold? would he bring it down to 6.5% or even 6%? he didn't deny it. he said it wasn't necessarily off the card and they would have to look at every position at the time. remember, there is political will to keep rates low.
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we have the bank of england credit survey out yesterday talking about credit conditions being very good, the best for mortgages and the best for lending even during the p precrisis time. even though net lending is down. part of that reason is for interest rates being low. so i think there is political will to keep those interest rates low. another thing to watch out for is i guess what we see in the minutes later this month. in the last mpc meeting, we saw that the committee was concerned about sterling strength. and remember, the uk government is really trying for this rebalancing of the economy. we haven't seen that so far, but there will be one eye politically on what uk exports are doing and sterling strength will have an impact on that. >> yes. there was a very good article this week that said not to worry about sterling strap. i can't remember who wrote it, but it was terribly good.
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>> i'm sure it was. no doubt. >> we'll discuss that a little later when you come back in from the cold. >> so should the bank of england head to forward guidance or not? for more on the communication conundrum, head to cnbc.com. we also have coverage of the ecb bank of england rate decisions. that kicks off at 12:00 london time and we will have a special two-hour program. julia will be joining me for that later today. what's happening with asset prices ahead of that? we have a little higher on the dow jones stoxx 600. advancers outpacing decliners by a ratio of 6 to 4. not quite that. you can see the move on the stoxx 600, not very much. 0.08%.
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the uk has been dominated by numbers out from the retailers. nevertheless, it is up around 10 points after being down 33 points. still pretty flat so far this year. xetra dax is up 0.2%. flat on the cac 40. the ftse mib is up 0.3%. let's kick off with tesco, first of all. it's reported 2.4% drop in its christmas period sales. that's towards the low end of analyst forecasts. outside of britain, the world's third biggest retailer says sales improved in europe, but remains difficult in asia. morse yop, taking a big hit. they had a 5.6 of% drop excludeing fuel in its holiday sales. the firm blaming heavy discounting by rivals. sainsbury is not faring any better. it's currently off 2% a day after cutting its full year forecast and warning over cautious spending, despite
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reported quarterly sales growth of 2%. comparable sales dipping. food doing fairly well, though. but what is clear, this has perhaps been the toughest quarter general ly for retailin. at 10:30, we'll be taking a closer look of the sector. so that's the retailers in the uk. let's move on and show you where we stand with bond rates. treasury yields back towards the 3% mark. adp yesterday was the best in 13 months. we had a higher yield, as well, and a ten-year auction and we've seen two-year bills up to a four-month high, as well. keep our eyes on gilt yields. 2.98%. ten-year bund yield, 1.9%. on the currency markets, the dollar index has been up at a
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seven-week high today. euro/dollar yesterday hit a one-month low. we're back to this 1.36 mark. we've been over here hovering around 105 for the dollar/yen. aussie back down to 0.8877. and sterling, just above 1.64, as well. now, that's here in europe. price pressure meanwhile in china eased in december. consumer inflation grew 2.5% last month. that's down from the previous month, 3%. cpi for 2013 at 2.6%, which is well below the government's target of 3.5%, leaving room for the government to push ahead with reforms without worrying about run away prices. but in a sign of persistent weak demand, prices at the factory level eases down for a 22nd straight month, down 1.4%. how has all of that fed into asian asset prices? li sixuan has the data out of
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singapore. >> hi, ross. you mentioned about the inflation data. on the whole, asian markets came under pressure ahead of friday's u.s. jobs data. japan's nikkei 225 lost 1.5% and saw some profit taking in recent outperformers such as nintendo. over in china, the inflation data came in at a seven-month low giving markets a short lift boost and china markets slipped further. the shanghai deposit ended down by 0.8%. do note that eight companies are set to take their ipo subscriptions this week, raising concerns over shares and this brokerage stocks lower. meanwhile, the nasdaq is out. china exports was able to hold on to its early gains, ending down by over 2 the%. this after yesterday's over 3% jump. and over in seoul, the bj kept rates steady, but the kospi still lost 0.7% after invefrters
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got spooked, especially for some chemical stocks. but australia's asx 200 ended higher by 0.2%. jaufr shore oils, limit up by 10% after expecting its 2013 profit to have jumped 220% and that's significa aanwhile, chind 5% today. other oil stocks made a strong rally. >> sixuan, thank you. catch you a little later. norway is now a land of millionaires, apparently. and high oil and gas prices helped push the company higher. it's a fraction more than 1 is million times the country's population, making every system a theoretical millionaire.
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now, to find out how the windfall is going to be spent, just a clue, norwegians won't be able to splash the cash personally. head to cnbc.com for that. follow us on twitter, @cnbcworld. plenty more on that. indonesian central bank has come out and left rates unchanged, as well, at 7.5%. they're apparently confident that the inflation will be in the 3.5% to 5.5 range in 2014 and 2013 economic growth around 5.7%. and in 2014, that is likely at the lower end of their 5.8, 6 of.2% growth rate. we're going to get more on this central bank decision coming up. also, south korea's central bank has held interest rates, as well, despite a stronger currency. we're going to dig into all
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those decisions when we come back. welcome back. how is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex.
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we just heard from the bank of indonesia. they have left rates steady. joining us is jeff ping in singapore. let's kick off with this indonesian move. does this mean they are less worried about currency weakness? >> well, we are still expecting them to hike rates again in the first half of this year. and we do see some pace of hiking. i think going to the second quarter of the year for now. also, the inflationary price has been cut for now. >> what about the impact of
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tapering? they have been we've been fairly calm about it. but if the dollar index is up at a seven-week high, if the dollar strengthens more this year and the fed steps up their pace of tapering, then what happens? >> i think we are believing the fed will continue to taper the first half of this year. we think especially for southeast asian currencies to continue to trend higher, this is due to i think a lot. countries or economies still having a lot of current account deficit or concerns at the moment. but i think for the second half of the year, i think we do see some pace of recovery downwards for this currency. >> meanwhile, korea, got the opposite forum. particularly against the dollar and the yen who they compete with. the bank cut rates in may. since then, they've been fairly steady. what do they do this year?
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>> well, we do believe that they also allow allow high rates in the asian economies. but we only project a rate hike in q4 of this year. i think the boj is likely to be very concerned about the nature of its recovery, even though gdp growth has been bottoming out and exports have seen a recovery. however, we have not seen the housing market having improved much. so they'll be concerned the korean won doesn't become too strong and slow the pace of its recovery. >> timely, the philippines are still recovering from the storm
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it took last year. but what do you see happening? >> we think the overall growth and inflation remains mixed. i think mainly the inflation rise is due to higher inflation. energy price strikes. overall, we think that inflation will stabilize around the same level. and they will keep the policy much anchored for the rest of the year. >> jeff, thanks for that. the u.s. shale revolution continues to test reliance. the ceo of exxon mobil thinks
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it's too early to call energy independent. >> i like the use of self-sufficiency. by 2020, it's apparent to us hat become a realistic aspiration now. we're already the world's largest natural gas producer. we're producing last year our crude oil production, surpassed levels not even since the 1980s. and it's expected we'll continue to add to capacity over the next two years. so i think it is realistic that the u.s. could be energy self-sufficient, energy security by the end of this decade. >> when do you think they will be commercially realizable? >> china's in-place shale
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reser reserves would indicate that they're larger than the u.s. however, there are a number of attributes to china's shale gas reserves that make them particularly challenging. most of these reserves or these formations are buried much deeper than they are in north america. many of them are in very remote areas where there's not infrastructure to support their development. many of them are in areas that are very difficult to rein, so building drilling sites and roads to them is challenging. >> realistically, is this a decades long story? >> yeah. i think that's really the question, sri, is what's the pace? i think there's no question that china will develop a portion of its shale gas reserves. how much of that enormous endowment will be developed is somewhat difficult to judge. and what those of us in the industry that are working with
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the chinese companies today are doing by and large is we'll in an evaluation mode. >> are we seeing real escape velocity in the u.s. economy? number one. and number two, was the fed right to taper on that basis? >> in my view, the fed was correct in beginning its taper. in terms of the u.s. economy, i think my view is the same that you would hear from many u.s. businessmen. our sense is that the u.s. economy is very well positioned to begin a steady and potentially robust economy. why is it not happening? i think the reason it's not happening is we continue to deal with a relative amount of uncertainty around physical policy in the united states. and what's been an extended period of the last two to three years of uncertainty around a
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number of areas of regulatory impacts. now, the keyboard in the future, apparently, this so says john chen in an interview with re/code he's betting the company's smartphones with a quirky keyboard. it's a main tool for businesses, especially those regulated in industries such as the sector. by the way, nbc news group is the share hold honor in re/code and cnbc has a content partnership. blackberry stock today is down another 2% in frankfurt. but we're asking you, what do you think about keyboards? are they a think of the past or worth holding on to? do you still prefer to use one on high power tech? let us know.
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e-mail, world would it@cnbc.com, tweet @cnbcwex or direct to me@rg are rg. while you consider that, still to come, a not so merry christmas for two of britain's biggest retailers. we'll look at britain's high street hardships after this. and ah, so you can see like right here i can just... you know, check my policy here, add a car, ah speak to customer service, check on a claim...you know, all with the ah, tap of my geico app. oh, that's so cool. well, i would disagree with you but, ah, that would make me a liar. no dude, you're on the jumbotron! whoa. ah...yeah, pretty much walked into that one. geico anywhere anytime. just a tap away on the geico app.
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and the headlines from around the globe, record inflation growth. will mario draghi surprise the markets again today? bank of england's governor mark carney facing a different dilemma. investors wondering if the central bank will lower investors and lower its unemployment target. chinese consumer inflation hits a seven-month low leaving room for more progress policy. but deflation is sparking worries over weaker demand. and bah humbug for british retailers. christmas sales send uk retailers down towards the bottom of the stoxx 600. talking about the uk, we
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have trade data that has just come out. the november global goods trade balance widening out -- sorry, it's actually narrowed. 9.439 billion. it's the narrowest deficit since june versus the revised 9.615 billion. the total goodness and services trade balance, the narrowest deficit august versus october. in fact, the trade deficit narrowing slightly in november, so a little better than we might have thought. meanwhile, european equities today have been fairly flat to higher. we stand a quarter period higher right now for the ftse 100, 0.5% for the xetra dax and ftse mib up 0.8%. 10-year gilt yields just under
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the 3% mark as are treasury yields, as well. slightly lower in spain and italy. you can see firmly below the 3% mark at 3.7% and 3.8% mark respectively. on the currency markets, dollar index has been up to a seven-week high. euro/dollar, still in its 136 month. we hit a one-month low yesterday. dollar/yen, still just around that 105 and cable, 1.6450 about a cent away from the 26-month high we hit a week or so ago. it has been a fairly bleak christmas. tesco and marks & spencer both reporting weak sales for the holidays. like-for-like sales dropping 2.4% in the six weeks to january. m&s saw sales jump by 1.8%. although closing sales for the retailer down for the 10th straight quarter.
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william morrison, it's down 5.5%. marks & spencer is up 3.3%. how does this play into our views about consumer confidence? let's kick off with helia outside the bank of england. what do you think the bank's view will be of consumption patterns? we have seen actually consumers snend lots of those discount retailers. so it's been a really horrid christmas for some of those main super markets. but the likes of aldi and little have done well and taken a lot of market share. ults saw mortgage data coming out. consumers in the uk are driving the uk economy. you mentioned morrison.
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today they brought out for what qualifies as a profit warning. the autumn and winter collection, he said he was going to turn around the power. that hasn't come through. the interesting number in m&s says if you look online, 100% increase in their app orders on a tablet and an 80% increase. this is the era of online sales. and when you look at morrison, tomorrow they're going to have tr first food delivery. that is 13 years after. you can see markets are struggling with that traditional super market format.
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but even in their numbers, you saw the traditional super market component wasn't doing very well. people like aldi, people like little, coming in and grabbing market share. but dismal day for the retailers today. >> yes. still, you like a great mince pie, don't you? because they've done quite well. they had sales up 3.5%. i know you made your own contributions to that, helia. >> i know. but mince pies over christmas are a must. and food sales for m&s were up, but not as much as analysts had hoped. >> great. thanks for that, helia. why -- just saying, he reckons this is probably the toughest trading quarter in 30 years. but for the sector. why? >> lots of different factors. i think this is -- we obviously
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had a couple years of recession. i think consumers are feeling quite pinched and quite stretched. shoppers have bought less foot. on top of that, as we've heard, there was a record christmas. jn line, as well, we've heard all the retail and resorts. >> i think what's been
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happening, now we're seeing that shopping, m&s going to the discounters and perhaps doing the bulk of their shopping at one of the super markets. real fragmentation and that's spreading spending across a much wider variety of retailers we would have seen say 10, 15 years ago. the big four in super markets are really, really hurting. >> is it no longer -- let's just say there is a view that we could take market share, we don't mind about the pricing. but that seems to have disappeared here. >> yeah. i think it's become pretty much the game, the big four are hurting each other with these discounts, with this couponing. shoppers are going up the big
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four and trading downwards into the discounts. they have done a blinding job of discounting themselves. >> it is such a mixed picture. you then look at what next announced and compare that to m&s closing. and you look at john lewis. the difference between the winners and losers is so stark. i think the next stop for shoppers is great clarity and often great consistency which are two characteristics sadly absent from what m&s -- how long does mark wollen have, do you think? >> he has about probably a year to say a 15, 16 month, i think.
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>> it's been a welcome from fashion reporters. but there's a real big difference from fashion reporters and mr. and mrs. public who have to go in. >> thanks for that. staying with food, producer danonsays it's terminating its existing contract delaying a possible contamination of ingredients. supplies to the company. stephane has more for us out of paris. what's going on? >> hey, ross. a provider of milk powder to international food giants like danon. danonis one of the biggest clients. danondoes not say how much money
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it would seek. but it would request food compensation for the 350 million euros in lost sales after the recall of baby food products last year. they issued a warning last year about a potential contamination of its milk products after the products were recalled in nine asian countries, including china. danone is seeking compensation for this problem. it's disappointed that the ongoing discussions with danone led to legal action. it is crucial, ross, for danone to protect its republic eyetation. baby food is one of the most profitable parts of its business and it accounts for nearly 20% of its profits. still to come, will nsa
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whistleblower edward snowden's testimony help for the european parliament further damage european/u.s. relations? we'll ask an expert straight after this. welcome back. how is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex.
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apple and samsung have agreed to mediation in their ongoing patent fight. the two ceos will attend the session with in-house lawyers only sometime before february 19th. the companies are facing a march trial date over apple's claims that samsung infringed its smartphone patent. it's been to court twice in the last two years with juries awarding apple a total of $930 million. apple stocks pretty flat today. the keyboard is the future, apparently, according to the blackberry ceo in an interview with re/code. he says he's betting the company's fortunes on a smartphone with a keyboard. and he says blackberry, therefore, won't be winning by
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competing for games and apps, but should focus instead of being the best at getting work done. and it's just the stocks still down another 2% today. cnbc has a content partnership with re/code. what do you think about keyboards? are they a thing of the past or are they, as is suggested, playing a role in the future? let us know. get in touch with us. nasi tweeted a study of hand set sales says it all. world would it az cnbc.com, tweet @cnbcwex or direct to me @rosswestgate. now, five people are dead following an explosion at a material plant in central japan. the blast of the mitsubishi materials factory injured 12 others. it happened during the cleaning of heat exchange equipment. the same factory had been ordered to be shut down by inspectors two years ago. it had been generating high
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pressured gas without authorization. sony shares, meanwhile, are up in tokyo on expectations the struggling electronics giant may finally manage to get its recovery on track with the help of play station 4 and some ambitious new plans. yukako has more for us from the nikkei. >> hi, ross. yes, the new play station 4 is seeing a good start, beating sales of rivals microsoft xbox 1. but another cash cow, sony, and its investors are looking at smartphones. the president said in an interview with the nikkei that he aims to double global sales to an annual 18 million units in two years' time. it will be rolling out its flagship hand set experience outside japan in february and is set to make a full scale entrance to the world's two big markets, china and the u.s. the tokyo market welcomes sony's plan to get back on the
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defensive sending shares higher, ending up day up nearly 4%. but some analysts say that the company's tvs and digital cameras are still slumping. that is all from nikkei business report. back to you, ross. >> yukako, thanks for that. in asia tomorrow, with plenty of worries about china in's export growth, we'll get a clear picture with the sdooes december trade figures. also get money supply readings. india is releasing factory output data from november. and also in taiwan, chipmaker tsmc releases december sales. >> whistleblower edward snowden is set to give testimony to the european parliament within days. spokesperson has told cnbc the european parliament committee on civil liberties, justice and homeland affairs will decide
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today whether snowden will answer live questions or as expected send prerecorded answers. the testimony will be published on monday, despite u.s. congressman mike rogers decla declaring it beneath the dignity of the parliament to invite snowden to speak. good to see you. >> thank you. >> the first question is, we would like to know where snowden is. he was in moscow, and then nothing. >> and that's why, if he gives testimony at all, he'll do it on a sort of recorded link. because obviously, the americans in particular would dearly love to know where he is. because they want to extra diet him. >> do you think he's under the protection of a government inspect somebody is looking after him somewhere, they must be. >> yeah. and obviously fingers point towards russia. russia are enjoying this very much in the sense that it's
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driving a big rift here between europe and the u.s. on a whole range of issues. that will suit them very well. >> yeah. if he does this testimony, how big of a rift is it going to drive between europe and -- and clearly, the libertarians and those who are all about security concerns. >> it's actually a very complicated pictures. it's not as black and white as it seems. within europe itself and between countries and within countries, there's a rift between those on the civil libertarian side, those who believe in strong security and there's a big dinners between countries. the uk has a strong relationship with the u.s. other countries like germany, sweden, france, have been found to have had their own big surveillance programs themselves. so a lot of the political infighting is within and between europe as much as -- what is snowden going to say? why would he want to do this? >> well, he says it's in order
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to put a stop to their unregulated flow of surveillance technologies. to generate did want debate, that's what he says. he's generated debate and made a lot of waves. really, he wants europe to react in this way and to clip the u.s.'s wings, i think. >> what will the parliament want to know of him? >> they all want to know the extent of this, the technical details, how is this done, how big is it, how could it be reigned in and curtailed? >> and this comes after the revelations with angela merkel or would they want to know the extent of u.s. spying on their own governments and if they get some answers on that, one wonders where we start to see a bigger division between information sharing or security
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pooling between certain countries and the u.s. >> yes, they will want to know that, who has been spying on whom and how much. i think in terms of the impact on that, there's actually -- we shouldn't overstate it. there are practical realities, european government needs to share intelligence with the u.s. they'll continue the need to do that. actually, i think the impact may be. >> is this more of an embarrassment? although they know what the real situation is. >> i think there's a lot of truth to that. it's important in the political mustering and the day-to-day reality of what's going on. >> we'll find out what they're up to, right? i'm presuming that's what we do. is that prediction wrong?
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>> i won't comment on that. a lot of people will share your presumption and it's a reasonable preassumption to have. >> thank you for coming in. >> rolls-royce says it will create new jobs after sales last year, demand increased to 600,000 units. the ceo has been speaking to helia. >> we have seen this in the middle eastern market. middle east was excellent for plus 17% last year. and that is also very much due to the growing economy down there. >> we know that the luxury car segment is the first to be hit by a global financial crisis, but also the first to recovery. can you comment on the last five years and talk about where in the world is going to be the highest growth. >> the china market was explosive in 2010, 2011. what happens now is that the
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china market is maturing more and more. for that reason, it's not surprising that we now see more constant growth and that it isn't any longer as explosive as we've seen it. europe is still, for us, weak. and different prognosis are around i would expect europe still takes a couple of years until the markets are recovering. >> i would say more in the direction of five years. has it ban success? >> it's a rosie, peaceful and successful marriage that way. taking the jokes aside, i think the combination between the
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engineering competence and the power of the bmw group and the availability of technology and also the availability of certain components which we then can use for engineering rolls-royces has help tremendously. >> are there any -- what if it took over from germany? >> as long as the uk stays competitive and also stays within the european union where i'm convinced i should stay in, i'm not worried about that at all. >> what would the effect be on the car industry if the uk was to exit europe? >> it would cut a very strong connection, i would say, which is unnecessary, in my understanding. and i wouldn't do it.
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hello. you're watching "worldwide exchange." i'm ross westgate. here are your headlines from around the globe. highways with the danger zone, record low inflation in the eurozone puts increased pressure on the ecb to deliver more easing measures. but will mario draghi surprise today? the bank of england governor facing a different dilemma. investors wondering if the central bank will lower its unemployment target. strong holiday season sales and job cuts have sent macy's shares higher in after hours
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trade, but bah humbug for uk christmas sales. plus, chinese consumer inflation has reached a seven-month low. but factory deflation is also sparking worries over weak demand. welcome to "worldwide exchange." we saw u.s. stocks down yesterday, the dow down 46 points. right now, the dow is some, what, 64 points above fair value. the nasdaq at the moment is trading around 12, 13 points above fair value and the s&p after falling some 0.4% yesterday is currently 6.5
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points above fair value. take a look at the dow jones stoxx -- sorry, the ftse cnbc global 300. we're rather flat at the moment. european equities have nudged up. the if it is tts 100 was down 33 points yesterday. today, with retailers very much in focus, we're up 20 points, up about 0.3%. 0.4% higher for the xetra dax. the cac 40 is up 0.25%. it has been probably the hardest quarter they have witnessed for around 30 years. let's run through those. tesco reporting a 2.4% drop in its uk christmas period sales. that's towards the low end of analyst forecasts. sales improved on europe but still remained fairly difficult
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in asia. stock down around 1 %. wm morrison taking a big hit, blaming heavy discounting. it came out with a statement counter mand to its profits warning. sainsbury is off 2.1% despite reporting quarterly sales growth. marks & expenser is up 2%, but it has struggled in its home market. comparable sales down 0.2%. the firm says the results were way below their own internal expectations. now, keep your eyes on the bond markets. bank of england meetings today, as well. ten-year gilt yields just below the 3% mark. as are treasury yields here. 2.89%. we did see two-year t-bills hitting a four-month high, as well. and we saw the high on the ten-year auction yesterday came
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in the highest since may 2011 is. the yields at auction for that selling around 21 billion of ten years, all based on, as well, the fact that we have a strong adp number which has boosted expectations on the payrolls report tomorrow. on the currency markets, all of that helped the dollar up to a seven-week high. besides all of that, we've had inflation data out of china today. inflation at a seven-month low came in at 2.5% last month, down from the previous month's 3%. that's left cpi for 2013 at 2.6%, well below the government's target of 3.5. but it does leave room to push ahead with reforms without worrying about run away prices. but in a sign of persistent weak
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demand, prices at the factory level were down for a second straight month at 1.4%. so how is that data played into the asian session? li sixuan has more for us in singapore. sixuan. >> thank you, ross. japan's nikkei 225 ended down by 11.5%. ross mentioned china's inflation data coming in at a seven-month low giving markets a boost. but over in australia, the asx 200 ended higher by 0.2% thanks to an uptick in retail sales data. the bank of korea and bank indonesia both kept rates steady
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as the kospi lost on some earnings fear and the composite closed flat ahead of the decision. chinese oil stocks buck the down trend. offshort oil soared limit up after profits having jumped 220%. other oil companies made a strong value today. back to you, ross. >> thanks for that, sixuan. now, the u.s. federal reserve is going to proceed cautiously with its tapering of asset purchases. some members expressed concerns tightening may be interpreted as a signal the t signal bank would taper quicker than initially expected. and while investors are focused on that when they came out, a little later they'll be focused on the ecb. the majority of economists in the media pekt the bank to keep its main rate at record low of
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on 0.25%. but can the ecb president ignore the slowing back drop of slowing inflation? geoff cutmore and annette are joining us. we had inflation this week. 0.8%, 0.7% on the core record lows for the eurozone. and the ecb's reference rate is 2%. what are they going to say about it? >> yeah. well, all of the numbers look a bit rough, don't they, ross, at the moment for the ecb? what are we, eurozone unemployment, 12% plus. youth unemployment, 24% plus. and then you have this more recent print on the inflation number, which appears to suggest that prices are moderating still in the eurozone. and you wouldn't expect that if you thought that growth is starting to recover and improve. but i suspect mr. draghi will tell you today that that's not
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the whole story. >> no. he will tell us most likely that inflation expectations are firmly anchored. we were already seeing inflation expectations well below the ecb target of below but close to 2%. so what i guess will happen is that he will reiterate his stance again and hear more about what the bank plans reporting another lto or the company. >> yeah. and that's the worry, isn't it? businesses have indicated that we are in a downward trend.
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if we were to see the start of these green shoots turn into something fuller, you would expect to see credit being extended into the real economy. but that is a dilemma here. i agree with you, annette, it's probably going to be more of the we're ready to act language than anything you can hang a hat on today. >> a lot of the questions will center around that asset quality review. the bank was saying also that the details of the stress tests by end of january, so we are not nearly there, but we are close to end of january. so there might be more questions during the stress tests. >> yeah. none of the economies that we've spoken to here this morning believe there will be any move on official interest rates, largely they expect it will be more off from mr. draghi rather than anything that looks like a real policy initiative, ross. so on that, we'll send it back to you. >> thanks for that, guys. we've just had some data out of the eurozone, as well.
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economic sentiment actually up to 100 in december. from 98.4 in november. so stronger, as well, than the poll was expecting. business climate, 0.27, a little stronger than we might have expected. industrial climber minus 3.4 versus minus 3.9 in november. so those numbers are going to right way. meanwhi meanwhile, we have focus on the bank of england. what's going to happen with forward guidance? particularly the unemployment threshold. an unemployment target of 7% has been reached. but the rate is already down to 7.4%, which is leading some to predict the bank will be keen to lower that threshold. helia is in london outside the bank of england. helia, it was notable from the
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fed there didn't seem to be a discussion about whether they're going to lower the threshold. do you think they are having that discussion in the that building behind you at this minute? >> they will in the meeting, i think, when it does happen, you're right. it's going to be about what is the shape of forward guidance in 2014. as you said, unemployment was way up high and the question is did they choose the wrong metric? if they didn't choose the wrong metric, can they change that metric without making a mocky of forward guidance altogether. they could, of course, as you said bring it down to 6.5%. i asked the governor that a couple of months ago. he didn't rule us out. but they could also use it has a staging post. there's a lot of verbiage from the bank governor saying even if it's down to 7%, that doesn't
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mean an automatic rate hike. we are committed to low rates because the uk economy is recovering, but it's recovering with a lot of stimulus and a lot of help. you were just talking about some data and i wanted to point to you, you talked about the trade deficit in the uk narrowing. what was interesting about that number, especially when you look at europe, is if exports of china in the last month changed absolutely zero. but the exports, the european trade partners has increased as those economy ves improved. so you were talking about sentiment improving in europe. we're certainly seeing that in terms of trade partnerships here in the uk. back to you, ross. >> huge trade partnership with germany. theoretically, that should pan out. helia, thanks very much indeed for that. helia will be coming back as we launch our extra program today for the bank of england and ecb. we're asking should the bank of england abandon forward guidance? head to cnbc.com for more on
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carney's communication conundrum. i love the producer who wrote all of that together. right. what should the bank do? joining us with his thoughts, andrew lilico. nice to see you. happy new year. let's kick off with the bank of on england first of all. do you believe in forward guidance? >> no. it's a roent why they had to advocate forward guidance, the credibility of the inflation target had collapsed and nobody knew how far you were allowed to be away from the inflation target before the policy was fortsed to change. we've seen the inflation go above 5%.
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then they said we're not going to look at the rise above any circumstances. then when they timely announced it, it appears there was these cutoff elements that might drive interest rates to go up higher. which was then interpreted hawkishly by the market indicating how little credibility the bank of england had at that point, they came in with a measure which was supposed to prevent yields from rising and that yields rose further as their response to it. >> so i think the whole idea was misconceived from the beginning. the underlying concept that in the recovery phase from this sort of crisis, you might do better than just saying what inflation you want to have for the next year. that is okay. it's just that the general credibility. >> and that applies, well, to the fed and the ecb has a weird not forward guidance policy. but does it apply equally?
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is there an issue for forward guidance for everybody? >> it's associated with japan in the early 2000s. the thought there was in the recovery phase, from the early japanese that there had been a number of occasions in which they might have looked like they were tightening a little quicker than was entirely appropriate. so the thought rose that you might want to manage expectations in the market a bit further ahead. i think they botched up the way that they did it. >> andrew, stick around. plenty more to come from you. we've got coverage of the ecb and bank of england decisions from 12 cet. that's the european viewers. meanwhile, what has google done to upset france? stay tuned to find out why the internet search engine has been fined by european countries. [ male announcer ] nearly 7 million clients. how did edward jones get so big? let me just put this away. ♪ could you teach our kids that trick?
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the european central bank and the bank of england get ready to make rate decisions while fed minutes suggest a caution on tapering. macy's expect the holiday cheer to extend in 2014 after posting strong sales over the christmas season. and tightening fears come up in china after seeing consumer inflation there hit a seven-month low.
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stephane is in paris with more of the details. stephane, how much has google been fined? >> something quite limited, if you compare to the size of the company. they will have to pay 150,000 euros, which is the maximum penalty you can get in france. in a case of privacy law enforcement. that's of course limited for a company like google. but the company would have to display the reasons of this ruling on its page. fwoogel.fr for at least 48 hours within the next eight days. so that is more i think for google. and this french ruling, ross, comes less than a month after fining google much more, $1.2 million for violating privacy rules. and it comes also as four other
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european countries, including germany and the united kingdom are leading investigations on similar cases that could lead to potential sanctions and fines. so in france, google did not inform users in the way the personal data is processed. as a result, users in france could not exercise their right to access, modify or delete that access according to the french privacy law. >> all right, stephane. meanwhile, the keyboard is the future, apparently. this is according to the ceo re/code. blackberry's main market is as a tool for businesses and this is an interview with re/code.
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what do you think about keyboards? are they worth holding on to for certain reasons? let us know. get in touch with us. david says, there is a place for qwerty keyboards, just wish it wasn't only blackberry saying this. whoouk, andrew? keyboards, like that, or are you happy to do, you know, touch screen? >> i think blackberry feels it would have to say that because they're stuck with that as part of their image. i think it would be very hard for blackberry to move away to another keyboard. >> so the right thing for them, but not necessarily for everybody else? >> probably. >> all right. still to come, the u.s. is putting it pressure on europe to get going with its banking union. a bit of a health check off
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europe's banking businesses after the break. mine was earned orbiting the moon in 1971. afghanistan, in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.
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another area where america is flexing its muscle is towards
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a banking union. the ecb is set to complete its health check off europe's big banks this year. they have effectively said jack lew is effectively saying, look, you understood to do more to create a common back stop for banks and to ensure they have enough capital to make enough loans to create jobs. do you think we'll ever get to a point where we have a common back stop? it's the one thing germans don't seem to one. >> i think it's the cart before the horse issue. you can make the ecb the fundamental backstop for all of the banks in the same way that the bank of england would be in the uk or the fed in the u.s. but i think you have to reach that stage. >> are we ever going to have sfusht political units? it's a hot potato. >> absolutely. i think that is the way the european union is going. making headlines this morning, that's the commissioner of the
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european commission, but the president of the european commission saying this again. i think that's exactly where things will go. i think things will accelerate after the european elections in may.. >> okay. when you -- how much of a political union do you need? >> the federation. >> forget the 60%, let alone the 60% debt to gdp talking 20. you probably won't be able to run any deficit us at all. and then the authorities at the center will spend lots of money.
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>> one might see a real big jump in anti-establishment parties. we're worried about marine lepenn. will that upset the apple cart? >> no. i think we will. and the way the european authorities will respond to that is they will say that's clearly the objection. >> and i didn't ask you about the ecb. is the ecb going to have more action this year? >> oh, this year? >> this year. >> it depends on how they have to react. things may go sour again in greece. but by and large, the draghi bluff, such as it is, seems to be working out. and i expect them to keep sticking with that bluff as long as they can without it being called. >> andrew, good to see you. thanks so much for coming in. still to come, the phasing
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out of the fed's bond buying program is set to continue, but will when it taper off? we'll have a perfect it after the break. u.s. futures are calling higher this morning. the doe up by around 7.0 points and the s&p higher by around 7. i need proof of insurance. that's my geico digital insurance id card - gots all my pertinents on it and such. works for me. turn to the camera. ah, actually i think my eyes might ha... next! digital insurance id cards. just a tap away on the geico app. could save you fifteen percent or more on car insurance. everybody knows that. well, did you know that when a tree falls in the forest and no one's around, it does make a sound? ohhh...ugh. geico. little help here. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state.
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this is "worldwide exchange." i am ross westgate. will mario draghi do anything to surprise us today regarding easing? bank of england governor mark carney has a different dilemma. investors wondering if the central bank will alter its forward guidance. strong holiday season sales and job cuts have sent macy's shares higher in after hours trading. but it's a bit of bah humbug for christmas sales. sending morrison and tesco shares lower. >> you're watching "worldwide exchange," bringing you business news from around the globe. if you've just joined us in north america, a warm welcome to you.
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right now, we're trading some 70 points above fair value. but we have been down 4 out of the first five trading sessions of 2014. the nasdaq at the moment is some 14, 15 points above fair value and the s&p 500 at the moment is 7 points above fair value after being down 0.4% by the close last night. the ftse cnbc global 300 is flat. european equities have been down during the session. this appears to be the worst qualitier for the grosses for around 30 years if you believe what's been going on. economic sentiment has picked up slightly. the kwet ra dax, cac 40 up 0.3%. nothing much expected.
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much will be focused on what draghi has to say about the weaker inflation picture and, of course, a euro that looks rather too strong for the economy. and the ftse mib up 1.2%, the best levels of the day so far. so with all this event risk and the employment data tomorrow following the stronger than expected adp, what are investors to do? here is a recap of some of the thoughts already of the guests today. >> the euro/dollar move lower could be accentuated by buying the dollar. and more and more clients have told me about the year when they move dollar bull run, may indeed outperform the economy and the fed moves towards the exit through stimulus. so all that helps. >> bond yields will gradually move higher over the course of the next few years as interest rate expectations continue to
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billion. certainly we expect the markets, bond markets to start pricing in expectations. >> it's always a relative game, isn't it? with bonds, i think over 18 months, the escape against bonds, it's tightening with monetary policy. and we were right, bonds with a strong performance. >> those are the thoughts of some of the guests. we'll get more in a few moments. remeend you what's been going on with the ecb today. eurozone inflation now down to 0.8%. the core is at a record low as well of 0.7%.
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there will be concerned about sliding more into an inflationary risk. the question will be what are their own forecasts to what is going to happen. particularly with a strong euro. there's no set time skiel for buying back the bond buying program. joining us now is nariman. >> nice to see you, ross. >> it's nice to speak in the warm rather than just the cold snow of davos. good to see you. they didn't seem to discuss lowering the threshold of the unemployment rate. does that surprise you? >> no, not necessarily. there's clearly a difference of opinion in the federal open market committee.
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some think it was the right thing to do. some are not sure. i suspect she'll keep the pace up of tapering. they may not accelerate it at the end of this month, but they'll keep going. our best guess is they'll probably be done with the bond purchases by the end of this year. that's the timing we see. >>. >> what is the risk of the data as it sometimes does in spring, sort of takes a downward dip. would they slow down or untaper? >> good question. as you know, ross, we've been disappointed now three years running in terms of growth. i suspect that's not going to be the case this year. the fundamentals look fairly strong. but you're absolutely right, if things do slow down in terms of economic activity, they'll slow
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down that process or certainly want to celebrate it. i think that will be data dependant on what they've already said, but in terms of the behavior, as well. >> they talked about inflation running well below the fed target. how comfortable do you think they are about it? >> clearly, some aren't that comfortable. but i sense some complacency on the part of the some of the committee members. but they're split, if you will. some are a little worried, some aren't terribly worried. >> nariman, stay there. the u.s. shale revolution is continuing the country's reliance on mobile fuel. but the ceo of exxon says he thinks it's too early to call the u.s. independent but rather
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energy self-sufficient. >> we're producing last year our crude oil production surpassed levels not seen since the 1980s. and it's expected that we'll continue to add to crude oil production capacity over the next two or three years. so i think the u.s. could be energy self-sufficient, energy security by the end of this decade. >> we started to see the impact on the latest trade data we got out. less imports of po troel yumm helping the u.s. how big a fundamental change are we seeing? what is the impact going to be on the dollar, as well? is it going to help the dollar get even stronger? >> well, this whole shale gale, as it's been called, is a human gauge changer. certainly the trade effects as you're saying reducing already the u.s. trade deficit. global imbalance was expectly
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talking about the u.s. trade deficit. that's a story of going, going, gone. it's gradually going away thanks to this oil and gas revolution in the u.s. importantly, it's creating lots of new jobs in the u.s., millions of them, actually. 2 million so far, probably another 2 million to come. so this is huge for the u.s. economy. it's one of those serendipitous things that happen. just to your question, it will likely put further upward pressure on the dollar in the next sort of five years or so as that trade deficit narrows. >> and what does that do for the rest of the world? >> that is a good question. i think it shifts things around a bit. european companies like chemicals, they're at a huge competitive disadvantage. they're looking at a huge competitive disadvantage on the one hand because of lower energy costs in the u.s. on the other hand, a weaker euro, stronger dollar will help them a little bit. so it's a little bit of this and
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a little bit of that but mostly it benefits the u.s. and until and unless other companies jump on this bandwagon which is, of course, a huge political issue, i don't see them benefiting from this particular technological change that we've seen recently. >> you hear a lot of bleeting before christmas with german countries, one about the strength of the euro, but also they're at a massive competitive disadvantage on the cost of energy, nariman, and one wonders how long everybody can deal with that. >> indeed. >> some of it is policy, as you know, ross. some of it is a renewable policy in germany and making it tough for german companies. >> nariman, stay with us and get a cup of coffee or cup of tea. earl grey is what i like. i don't know if you like that. today, blackrock has agreed
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with the new york ag to end analyst surveys. blackrock has said the purpose of the survey is to qualify analysts publicly available insight. the firm will pay for the on cost of investigation around $400,000, but no fine or penalty. blackrock stock down in frankfurt. and the u.s. energy secretary is postponing his trip to india next week amid the diplomatic route between india and new dehli. u.s. authorities accused her of underpaying her nanny and lying on a visa application. still to come, there was many happy returns for macy's during the holidays. we'll have a look, right after this. ♪ [ cellphones beeping ] ♪ [ cellphone rings ] hello?
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the blank of glbd andenglanb are getting ready to make rate decisions. macy's posted strong sales over the christmas season. and inflation hits a seven-month low.
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there was a fairly happy end to the holiday season for macy's. reporting pretty good sales numbers. bertha has been doing her bit, of course. she joins us for more stateside. hi, bertha. >> hi, ross. i do my bit. in fact, macy's flagship massive store is maybe like 15 minutes away on the subway. i never go there. i always shop online. and apparently a lot of other folks do, too. macy's reporting sales for the holiday season, november and december rose 3.6%. that includes sales at brick and mortar stores and in the third quarter, illustrate easily outperformed rivals such as kohl's, jcpenney's and walmart. holiday sales overall rose 2.7% nationwide.
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it will add positions, however, to its growing online business because of people like me who don't like going to the store. so overall staff levels will remain about the same. macy's is going to combine some store districtes and close five underperforming locations. shares rose 5% after hours trading in the u.s. meantime, frankfurt sales are up 5%, as well. other retailers are weighing in on their holiday experience. costco rose 3%, including the impact of fuel sale and foreign exchange. analysts expected sales to rise 1.8%. costco's results were boosted partly by online sales in the u.s. and canada. in frankfurt, costco shares at
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this hour are trading -- i'm having a little bit of trouble finding the board, i guess. it's not coming up. but we'll see if the street likes that. there we go. not too impressed. down in frankfurt about 1.4%. bed, bath & beyond says third quarter profits messed forecasts and revenues fell short. same-store sales fell 3% on the quarter. it expects fourth quarter same-store sales to rise 2.7%. the company's ceos are blaming lower margin merchandise and an increase in promotional coupons. shares were down 8% in after hours .now down nearly 9%, at least in trading in europe. we'll see what happens at the opening bell here in the states. one of the interesting things with bed, sxwath beyond, they
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have these coupons, ross, for 20% off. they never expire. so if you just save them and you need to buy something, you bring them and and you get up to 20% off. that's kind of hard when you can't really manage that. >> no. i get that. did you do much online shopping, bertha? >> i -- i think i -- i think i bought two presents that were not online. everything else was online, easy shipping, so i didn't have to go to the post office. it's just -- i'm hooked. >> i don't know how much of that is desktop or mobile. but apparently, the keyboard is not in the past. the ceo of re/code says the keyboard is key. it's a tool for businesses, especially those in regulated
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industries such as the financial sector. just worth putting up that cnbc news group is a minority share owner. blackberry stock not helped by those comments, down another 1% today. you know, do you still like your keyboard? my personal phone is an iphone, but i still like the blackberry for work because it's easier for me to type. i don't know why. i just -- my thumb res clumsy when i try to type quickly on the iphone, so i find this a lot better for work overall. i see a lot of people with that
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dual phone situation. just for work. but when searching for an app or something like that, you want an android or an iphone. that's one of the things that i think they should concentrate on. the fact that that keyboard makes it much easier to write e-mails which is something that you do need to do when, you know, you're in business and need to return those e-mails quickly. >> on yeah. all right, bertha, thanks for that. good to see you. still to come, pass u.s. warms up on its polar vortex, how can they cope with unpredictable cancellations? welcome back. how is everything?
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afghanistan, in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve.
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temperatures are finally warming up in the states today. the economic compact of the polar vortex is just starting to be realized with millions of americans told to stay inside their homes over the last few weeks, the storm dealt a big blow to travel organizers, airlines faced with cancellations. joining us now, christopher philips. christian, good to see you. thanks for joining us. just how -- how destructive has this storm been? what sort of claims are we going to see on cancellations? >> i think it's a little early to tell at the moment. we'll start to be advised of claims over the next week or two or possibly over the next month. what we have seen are a number of people that aren't able to
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get to the news because of the flight cancellations, the public transports have been delayed, etcetera. the true value of claims at this point in time will hopefully filter through in the next few weeks or months. >> there's different aspects of this. event cancellation. there you get the loss of, what, advertising revenue, ticket, promotional sales. what other events do you have to -- or contingencies do you have to ensure against? >> well, as you said, it is revenues. pretty much most of these companies have revenues that are from people attending the event, merchandise will sell at the event, whether it be a sporting event, whether it be a conference trade show. so they have impacted. there is the cost they put on
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for this event. obviously, they've got sunken costs and from those costs, if the event is canceled, then they purchase coverage from us for event cancellation. >> meanwhile, airports, you talk about if you get cost containment, how does that work? is there a need to put on -- suddenly they need more snowplows or a lot more clearance for know snow. if they have an un seasonabseasd winter, they have to go and get additional money over time to clear the snow. they have to go and buy salt and grit. which obviously goes above the expected costs that they originally budgeted for. well, i'm sure you'll be fairly busy the next few weeks. thanks for that.
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>> how is this going to play into the numbers? >> the overall effect on the economy will be fairly small, maybe a tenth or two at most in terms of fist quarter gdp growth. this is a fairly small event compared with hurricane sandy or hurricane katrina, which did serious damage to infrastructure. people couldn't, you know, go anywhere for long periods of time. yes, this has been bad for a few industries, entertainment, airlines, but overall, the effects are small. i don't think it's going to factor into policy making. >> nariman, thank you for joining us. on the agenda today, we've got weekly jobless claims at 8:30 eastern. a pair of fed officials speaking and look at earnings today.
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good morning and welcome. welcome to "squawk box." the markets prepare for tomorrow's big employment report, first one after the year and the first one after the taper. retailers rolling out december sales figures while macy's cuts jobs, but provides a positive forecast. and new jersey governor chris christie is caught up in a traffic nightmare. it is thursday, january 9th, 2014. and "squawk box" begins right now.
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good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. as the s&p is coming off its fourth losing session in the first five days of the trading year. futures are indicated up sharply, up by about 68 points. i don't know if we made this ground up today, i don't know if we would take it. it's supposed to be the first five trading days. i hear joe complaining even though his microphone is turned off. >> file for an extension. >> an extension? >> i filed for one. >> there you go. so maybe we take today and tomorrow's activity? >> we'll see. we're going to make our own understand indicator up. keuchly jobless claims are going to be released at 8:30 eastern time. first-time filings rose slightly

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